Bitcoin, XRP, Ethereum Fall After Big Crypto Selloff. What Happened—and What’s Next.

Bitcoin is trading about 10% off the record high it hit last month. (Michael M. Santiago/Getty Images)

Key Points

About This Summary

• The crypto market experienced its largest deleveraging event of the year, with $1.7 billion in liquidations on Monday.
• Bitcoin fell 0.2% over the past 24 hours, trading about 10% below its record high from last month.
• Bouts of volatility have become the norm for crypto investors.

The crypto market just survived its biggest deleveraging event of the year. The recovery of the market might depend on Bitcoin staying above a key level.

Bitcoin, the world’s largest token by total market capitalization fell 0.2% to $112,848 over the past 24 hours, according to CoinDesk on Tuesday morning. It’s now trading about 10% off the record high it hit last month.

Created with Highcharts 9.0.1Sources: CoinDesk (Bitcoin); Kraken (Ethereum,​Solana, XRP)

Created with Highcharts 9.0.1BitcoinXRPEthereumSolanaSept. 20Sept. 23-12-10-8-6-4-2024%

Ethereum , meanwhile, fell 0.3%, Solana slid 1.5%, and XRP fell 0.5% over the past 24 hours, per CoinDesk data.

The crypto market had a brutal selloff on Monday, driven in part by the biggest wave of deleveraging in 2025.

Liquidations on futures exchanges on Monday totaled $1.7 billion, said analysts with Compass Point Research & Trading in a note on Tuesday.

Bitcoin futures only accounted for about 17% of the washout, the analysts said. Ether accounted for 30% of the liquidations, while other altcoins represented 53%. Leverage had built up after last week’s Federal Reserve decision to cut interest rates by a quarter point.

One key thing to watch will be whether the price of Bitcoin stays above $111,300, the average cost basis for investors who have held the crypto for less than six months. Unlike long-term holders, short-term investors tend to have little tolerance for net losses, and a break below that level could lead to a bigger fall, the Compass Point analysts said. When Bitcoin fell below its short-term cost basis in February, for example, the cryptocurrency dropped another 19% before stabilizing.

Bouts of volatility have become the norm for crypto investors, but bulls remain confident that Monday’s slump will end up being an isolated event. Digital assets have surged this year, thanks to U.S. lawmakers passing a slew of crypto-friendly regulations and institutional investors pouring money into spot exchange-traded funds.

“Overheated funding post-Fed left traders exposed,” Maja Vujinovic, CEO of Digital Assets at the Ethereum treasurer FG Nexus, said talking about the rate cut.

“But history shows that these ‘leverage washes’ often mark a healthier base…We’re more likely heading into consolidation than capitulation,” she added.

Write to Joe Light at joe.light@barrons.com and George Glover at george.glover@dowjones.com